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FERC Issues Letter Order Accepting Avista Corporation's 7/1/14, As Amended 10/16/13, 2/6/14, and 3/6/14, Filing of the Updated Market Power Analysis in Compliance with Order No. 697 Under ER10-2290 et al

WASHINGTON, May 14 -- The U.S. Department of Energy'sFederal Energy Regulatory Commission issued the text of the following delegated order:

In Reply Refer To:

Avista Corporation

Spokane Energy, LLC

Docket Nos. ER10-2290-002 and ER10-2187-001
May 14, 2014

Mr. Michael G. Andrea

Senior Counsel

Avista Corporation

1411 East Mission Avenue, MSC-23

Spokane, Washington 99202

Reference: Updated Market Power Analysis in Compliance with Order No. 697

Dear Mr. Andrea:

On July 1, 2013, as amended October 16, 2013, February 6, 2014, and March 6, 2014, you filed on behalf of Avista Corporation (Avista) and Spokane Energy, LLC (collectively, the Avista Companies) an updated market power analysis for the Northwest region in compliance with the regional reporting schedule adopted in Order No. 697 and pursuant to the Commission's order granting the Avista Companies authority to sell electric energy and capacity at market-based rates.
Your filings were noticed on July 1, 2013, February 19, 2014, March 14, 2014, and March 18, 2014, with comments, protests or interventions due on or before August 30, 2013, February 27, 2014, and March 27, 2014. None was filed.

Pursuant to the authority delegated to the Director, Division of Electric Power Regulation - West, under 18 C.F.R. section 375.307, your submittals filed in the referenced dockets are accepted for filing.

You state that the Avista is an investor-owned utility that owns and operates approximately 1,851 megawatts (MW) of generation capacity and purchases an additional 486 MW of supply through long-term contracts in the Avista balancing authority area. You state that Spokane Energy is a wholly-owned subsidiary of Avista that does not own or control any generation or transmission facilities. You also state that Avista has an electric transmission system that includes approximately 2,702 miles of transmission lines in the Northwest region and has an open access transmission tariff on file with the Commission and therefore has mitigated any transmission market power. Further, you affirmatively state that the Avista Companies has not erected barriers to entry and will not erect barriers to entry into the relevant market.

Market-Based Rate Authorization

The Commission allows power sales at market-based rates if the seller and its affiliates do not have, or have adequately mitigated, horizontal and vertical market power.
The Avista Companies have prepared the pivotal supplier and wholesale market share screens for the Bonneville Power Administration, Public Utility District of Chelan County, Public Utility District of Grant County, PacifiCorp-West, and NorthWestern Energy balancing authority areas consistent with the requirements of Order No. 697. In addition, the Avista Companies have prepared the pivotal supplier and wholesale market share screens for the Avista and Idaho Power Company (Idaho Power) balancing authority areas consistent with the requirements of Order No. 697, when the Commission-accepted Simultaneous Transmission Import Limit (SIL) study results are taken into consideration.

The Avista Companies' horizontal market power screens have been reviewed, and the Avista Companies pass both the pivotal supplier and wholesale market share screens in those markets, when the Commission-accepted SIL values are taken into consideration for the Avista and Idaho Power balancing authority areas. Based on your representations, the Avista Companies' submittal satisfies the Commission's requirements for market-based rate authority regarding horizontal market power.

Based on your representations, the Avista Companies' submittal also satisfies the Commission's requirements for market-based rate authority regarding vertical market power.
The Avista Companies must file electronically with the Commission Electric Quarterly Reports. The Avista Companies further must timely report to the Commission any change in status that would reflect a departure from the characteristics the Commission relied upon in granting market-based rate authority.
This action does not constitute approval of any service, rate, charge, classification, or any rule, regulation, or practice affecting such rate or service provided for in the filed documents; nor shall such action be deemed as recognition of any claimed contractual right or obligation affecting or relating to such service or rate; and such acceptance is without prejudice to any findings or orders which have been or may hereafter be made by the Commission in any proceeding now pending or hereafter instituted by or against any of the applicant(s).

This order constitutes final agency action. Requests for rehearing by the Commission may be filed within 30 days of the date of issuance of this order, pursuant to 18 C.F.R section 385.713.